Inequality or poverty: which is bad for growth?
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ACDE Seminar
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Recent research has highlighted a negative impact of inequality on economic growth. We re-evaluate this hypothesis focusing on both inequality and poverty and their interaction. We replicate previous results showing that inequality has a negative impact on growth. However, we show that when we account for both inequality and poverty, the negative effect of inequality on growth appears to be concentrated amongst countries with high poverty. This would argue for policies targeted towards alleviating poverty rather than policies about redistribution.
Updated: 15 October 2024/Responsible Officer: Crawford Engagement/Page Contact: CAP Web Team